Managing Employee Whistleblowers In The Age Of Qui Tam And Retaliation Lawsuits

As its business affairs and expenses have grown, there has been an increased alert on the part of the government to protect its interests against false claims filed in various fields and disciplines across the country. The health care industry is one sector of particular focus. The United States Department of Justice ("DOJ") has increasingly recognized the important role played by whistleblowers in the fight against false claims in the health care industry. In recent years, whistleblowers, their counsel and DOJ have recovered billions of dollars in taxpayer money as a result of the provisions of the False Claims Act ("FCA"). Medicare and Medicaid reimbursement protocols create a ripe source of exposure for health care professionals and health care facilities alike in this regard. Review of court dockets demonstrate that the number of qui tam actions filed has steadily increased over the past several years. These cases consume enormous amounts of corporate, governmental, legal and judicial resources, whether or not they prove to be meritorious.

Qui Tam Litigation

The FCA is a statutory scheme created to forestall fraud against the federal government by proscribing the presentment of any "false or fraudulent claim for payment or approval" to the United States. 31 U.S.C. § 3729(a)(1)(A). One enforcement mechanism permits an employee to bring a civil action, a so-called qui tam action, in the name of the United States. Id. § 3730(b)(1). The FCA allows an employee with information that shows an individual, company or corporation has knowingly submitted or caused the submission of false or fraudulent claims to the government to bring a lawsuit on behalf of the government. The government has the right to intervene and assume control of the action, but it need not do so. Id. § 3730(b)(2). A unique facet of qui tam litigation is that the complaint is filed under seal – and remains under seal for months (at least 60 days by statute) or even years. The purpose of the seal is to give the United States time to evaluate the case to see if it wants to prosecute the action.

If the qui tam action is ultimately successful (regardless of who prosecutes it), the employee, known as a relator, gets a percentage of the funds recovered. Id. § 3730(d). Qui tam lawsuits enable whistleblowers to earn rewards in lawsuits filed which secure recoveries by or on behalf of the government. In general, a qui tam whistleblower under the FCA is entitled to between 15 and 30...